Starting his professional career as an accountant, Phil Taylor then set up PMI advisory firm, Preferred Medical, and has not looked back since. Lucy Quinton learns more
Phil Taylor, managing director at Preferred Medical, bucks the trend in more ways than one. He initially qualified as an accountant but decided to make a u-turn and set up Preferred Medical – a private medical insurance (PMI) advisory firm – in the mid-90s. And contrary to the rest of the PMI market, which has continued to experience stagnant sales, Preferred Medical has seen sales grow over the past few years. Now, with business blooming, Taylor says it was always his intention to grow. "We've got to a point where the business has a critical mass and is growing every year," he says.
The key to future growth, he adds, is the development of affiliates in different areas: "Two months ago we signed a contract with Confused.com. They now advertise medical insurance and as people click through they are transferred to Preferred Medical."
Taylor says his role in the company is mainly strategic and involves planning relationships with partners and insurers when they develop new products.
He continues: "We have also developed relationships with big IFA networks and have had further meetings with other networks to help strengthen our position. We have a range of different ways of servicing the client. If an IFA finds someone wanting PMI they have a direct line where a policy adviser can refer it to us and then we conduct the business."
Within the PMI sector, the SME market is strong and is becoming increasingly sophisticated. A lot more people, in particular employers, want more than just medical insurance, Taylor explains. "They are looking for methods by which they can keep their staff healthy and have them treated quickly," he says, adding: "It was always a sophisticated corporate sector and now occupational health and wellness is coming into force."
Every year since 1999, the individual market is reported to be slipping, but that is not Preferred Medical's experience. Taylor says: "We grow our individual book every year and even if the total market is falling, there are new entrants every year and people with annual policies to be rebroked." Overall, Taylor appears optimistic that individual PMI will flourish.
"Despite marginal decline over the years, we have never experienced any difficulty in finding clients. I have great confidence for the future."
But while individual PMI is thought of as a luxury purchase, Taylor is surprised by the variety of people buying it. "We have plenty of people you wouldn't necessarily have classed as socio-economic groups A and B in the past," he says.
"People are beginning to see it as essential to keeping their livelihood. However much the Government invests in the growth of the NHS, there will always be a wait that people don't find acceptable if they are dependent on themselves for their living," he adds.
Current PMI offerings are not too expensive because nobody is taking fat profits, Taylor says. However, it is expensive for people to pay on a monthly basis. "The older people get, the more expensive it becomes. But the older you get, the nest becomes empty and the mortgage has often been paid off, so it is an alternative investment that people have to put up with," he adds.
Taylor also believes if someone can afford PMI there is a responsibility to have it because it funds treatment that otherwise would have to be funded by the NHS.
He believes PMI is a complex market because of the many different ways of underwriting and different levels of cover. "It's a product that I firmly believe should be advised on to make sure the client gets and understands what they want. It's ever so easy to buy something and a year later wonder what it is that was purchased. It's very much incumbent on us to keep in touch with clients regularly to make sure things are explained on renewal and they understand where things are going," he explains.
With personal health and fitness thrust into the public eye recently, there is a tremendous amount of pressure on people to look after themselves. Taylor takes smoking as an example: "If you simply say 'don't smoke' and write it in huge lettering on cigarette packets, people will still smoke. However, if they can have a discount from their PMI policy because they don't smoke then smoking habits will change. Suddenly it's worth stopping smoking before that next renewal because there will be a discount." He explains that he has seen evidence suggesting there is a surge of healthy activity when people's quotes are up for renewal so they qualify for a discount.
"Only 25% of cancers and heart defects are down to genetic defects, the other 75% is caused by lifestyle and environment," he adds.
There is likely to be innovation over the next few years as more people begin to think about how they can look after themselves and ensure their premiums are lower. The main issue in the PMI sector is cost led.
The industry has put in place several procedures on how to implement measures to control costs due to cost in health and keeping fit becoming increasingly expensive.
There has been nationwide publicity about herceptin and other expensive drug treatments for cancer and, according to Taylor: "Insurers are seeing significant increases in the number of high-cost cancer claims. But where does this go and who foots the bill?" He says clients are alive today who would have died had it not been for major innovations. Technology is going to accelerate development and it will cost a fortune to keep an ageing population running unless these issues are addressed. "The ageing population is being propped up by technology but are still in ill health," Taylor asserts.
Preferred Medical actively takes an interest in promoting medical insurance through discussion on the company website and writing about how important it is.
Technology
Taylor believes technology is key to the success of his business. His company has spent a huge amount of money on client management systems. "We effectively have a system now where you enter data into the system once and it's there for the whole process. In many cases we don't enter data at all as it comes in automatically from the client. If someone makes an enquiry from our website, they fill in a form and it automatically pre-populates our database and pre-populates the quote systems, which sit alongside the client record," he adds.
Taylor explains that it is now at the level where any inbound document is scanned and attached to the record and letters sent come from a data library and is then attached to the client record.
From a financial point of view as well, every time a sale is made it is entered on the system. Taylor confirms: "The process has totally turned round our rate of enquiries. Five years ago we were only conv-erting one in 20 to 25 enquiries whereas now this is reduced to one in four in most circumstances."
At the tender age of 55, Taylor says over the next 10 years there will be some form of exit strategy from his proudest achievement but he refuses to be drawn any further. "I am having a really good time at the moment. I love this industry. There is fantastic camaraderie between everyone and a genuine feeling that the market is interested in developing."
